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BETHESDA, Md. - Centrus Energy Corp. (NYSE American:LEU), the nuclear fuel supplier with a market capitalization of $3.44 billion and an impressive year-to-date return of 181%, has priced an upsized private offering of $700 million in zero-coupon convertible senior notes due 2032, announced Wednesday.
The offering, which was increased from the previously announced $650 million, is being made to qualified institutional buyers under Rule 144A of the Securities Act. Centrus has granted initial purchasers an option to buy up to an additional $105 million in notes within 13 days of issuance. The sale is expected to close on August 18, subject to customary conditions. According to InvestingPro data, the company maintains a healthy balance sheet with a current ratio of 2.59, indicating strong liquidity to support this offering.
The notes will not bear regular interest, with the principal amount remaining unchanged over time. They will mature on August 15, 2032, unless earlier repurchased, redeemed, or converted.
Initially, the notes will be convertible at a rate of 4.3551 shares of Centrus Class A common stock per $1,000 principal amount, equivalent to a conversion price of approximately $229.62 per share. This represents a 22.5% premium to the company’s last reported stock price on August 13.
Centrus will not be able to redeem the notes before August 20, 2029. After that date, redemption is possible if the company’s stock price has been at least 130% of the conversion price for at least 20 trading days during any 30 consecutive trading day period.
The company estimates net proceeds of approximately $680 million from the offering, or about $782.1 million if the additional purchase option is fully exercised. Centrus intends to use the proceeds for general corporate purposes.
The notes and any shares issuable upon conversion have not been registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption.
Centrus Energy provides nuclear fuel and services to the nuclear power industry. Since 1998, the company has supplied utilities with fuel equivalent to more than 7 billion tons of coal, according to the press release statement. The company currently trades at a P/E ratio of 31.06 and has received a "GOOD" Financial Health score from InvestingPro, which offers 14 additional valuable insights about the company’s performance and prospects in its comprehensive Pro Research Report.
In other recent news, Centrus Energy Corp. announced its plan to offer $650 million in convertible senior notes due in 2032 to qualified institutional buyers. The company also plans to grant initial purchasers an option to buy up to an additional $100 million in notes. This development follows Centrus Energy’s strong second-quarter performance, with reported revenue of $154.5 million and a gross profit of $53.9 million, exceeding Stifel’s estimates by 22.8% and 85.6%, respectively. Stifel has raised its price target for Centrus Energy to $242 while maintaining a Buy rating, attributing the strong performance to increased SWU pricing. William Blair has reiterated an Outperform rating, emphasizing Centrus Energy’s unique position in uranium enrichment and noting the continued rise in SWU pricing. Additionally, Centrus Energy appointed Todd Tinelli as the new Chief Financial Officer, effective August 11, succeeding Kevin Harrill, who will stay until August 29 to ensure a smooth transition. These developments highlight significant changes and achievements for Centrus Energy.
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